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> Because once you tax it and spend it, it's gone. Where did it go? Did the government burn my tax dollars in a giant bonfire? Tax money doesn't disappear. It

> Because once you tax it and spend it, it's gone. Where did it go? Did the government burn my tax dollars in a giant bonfire? Tax money doesn't disappear. It gets spent on things like schools, hospitals, the military, fire departments, police departments, SCHIP, roads, NASA, etc. You can argue about where exactly the money should go but it all ends up back in the economy. > > I pay tax on my home every year. > You don't pay it by selling your home and giving the government a percentage of the proceeds. You pay it out of your income. Nor does your paying property tax on your home reduce your home's value. So it's really an income tax, not a wealth tax If I lose my job and run out of savings that's exactly how I pay it. Trying to call it an income tax because I have income is a poor way to reframe it. > But I don't think the people who are pushing a "wealth tax" are thinking of it that way. I think they are thinking of it, long term, as a way to force very wealthy people to sell assets and give the proceeds to the government, which will then redistribute it somehow. I don't see this as a major problem. If I own a $100 million dollar yacht and have to sell it to pay a 1% wealth tax I would still have $99 million left. If I can't find some way to make money off of that $99 million before it gets chipped away to almost nothing at 1% a year then maybe it would be better for that money to be spread around instead of concentrated somewhere it isn't being efficiently used.

pdonis 8y ago
> Where did it go? It bought something, presumably. (That's if it didn't end up in the pocket of some politician or one of his cronies, or a lobbyist, or...) > You can argue about where exactly the money should go but it all ends up back in the economy. Yes, money circulates around indefinitely, but money isn't wealth. > If I can't find some way to make money off of that $99 million before it gets chipped away to almost nothing at 1% a year then maybe it would be better for that money to be spread around instead of concentrated somewhere it isn't being efficiently used. If the government actually did make more efficient use of money than individual taxpayers would, I might buy this. But very little of what the government does meets that test. Also, if you're making money by creating wealth using your $99 million starting stake (say you start a business with it, for example), and paying the wealth tax out of that, then you're doing what I described before: you're paying the tax out of income, not wealth. More generally, if people keep on creating wealth faster than the government is taxing it, then yes, there's no problem (or at least, not the problem I was trying to describe). But that's the situation I was describing when I said the tax is really an income tax, not a wealth tax. (I agree that "income tax" vs. "wealth tax" is not the best terminology to use to describe this distinction, but it's what we have.)

pdonis 8y ago

> Where did it go? It bought something, presumably. (That's if it didn't end up in the pocket of some politician or one of his cronies, or a lobbyist, or...) > You can argue about where exactly the money should go but it all ends up back in the economy. Yes, money circulates around indefinitely, but money isn't wealth. > If I can't find some way to make money off of that $99 million before it gets chipped away to almost nothing at 1% a year then maybe it would be better for that money to be spread around instead of concentrated somewhere it isn't being efficiently used. If the government actually did make more efficient use of money than individual taxpayers would, I might buy this. But very little of what the government does meets that test. Also, if you're making money by creating wealth using your $99 million starting stake (say you start a business with it, for example), and paying the wealth tax out of that, then you're doing what I described before: you're paying the tax out of income, not wealth. More generally, if people keep on creating wealth faster than the government is taxing it, then yes, there's no problem (or at least, not the problem I was trying to describe). But that's the situation I was describing when I said the tax is really an income tax, not a wealth tax. (I agree that "income tax" vs. "wealth tax" is not the best terminology to use to describe this distinction, but it's what we have.)